The City of Ekurhuleni (CoE) launched the R300-million Fetola Enterprise Development Fund with the National Empowerment Fund (NEF) on December 6 at the KwaThema Business Hub.
The event was attended by Minister of Small Business Development Khumbudzo Ntshavheni as well as 500 local entrepreneurs who are among the intended beneficiaries of the R300-m committed by the two institutions over the next years.
“Economic transformation is imperative and SMMEs are key drivers and contributors to job creation and economic progression. We need to create an enabling environment for their growth and sustainability through the right policies and targeted support mechanisms to ensure their participation. “Availing information on funding, reducing the cost of funding and bringing business support services closer to communities are some of the measures to unlock funding bottlenecks,” said Ntshavheni.
The Fetola Fund is one among four investment funds approved in October by the Ekurhuleni Council to implement the Ekurhuleni Community Enterprise Development Fund (ECEDF) Policy in line with the Municipal Finance Management Act (MFMA). ‘Fetola’ is the Setswana word for transformation.
“What we are seeking is to achieve inclusive growth so that black entrepreneurs in the townships, in the cities and in rural communities can also become integral to the country’s economy,” explained NEF CEO Philisiwe Mthethwa.
“The ECEDF is anchored by the Ekurhuleni Ten-Point Economic Plan, a deliberate programme to position the Gauteng Eastern Development Corridor as the anchor and footprint of the provincial economy. The City has prioritised the (SMME) sector as a job creation catalyst that must be fully supported,” said executive mayor Mzwandile Masina.
This fund is made up of four groups – the Phanda Fund, the Ximilani Fund, the Fetola A and the Fetola B funds.
Under the Fetola Fund, entrepreneurs will receive 50 per cent of their funding requirement through the regular NEF funding criteria and the balance through the contributions received from the CoE. CoE contributions will be priced at concessionary rates of between zero and five per cent fixed interest rate.
The Fetola Fund will provide financial support to black entrepreneurs conducting business within the City of Ekurhuleni and those conducting business with the CoE.
The fund will focus specifically on majority black-owned enterprises that are commercially viable and sustainable, as guided by the NEF due diligence processes. This partnership will further unlock investment support in key sectors for new and established small and medium enterprises.
